That was good enough to beat Sony's PlayStation 3 sales for the month, but not the Nintendo Wii, even though Microsoft undercut the popular console on price, according to U.S. sales data from The NPD Group.

-- Sony sold 232,400 PS3s, for a life-to-date U.S. total of 5.5 million.
-- Nintendo moved 687,000 Wiis, bringing its total to nearly 12.6 million.
-- Microsoft's 374,200 Xbox 360s make for 11.2 million sold life to date.

The industry as a whole had its first down month since March 2006, NPD analyst Anita Frazier said in an e-mail. That's largely because September 2007, when Microsoft launched blockbuster title "Halo 3," makes for a tough comparison.

"Overall, the health of the video games industry remains quite strong despite the rocky economic conditions," Frazier wrote. "Tracking against typical industry seasonality, the U.S. video games industry is positioned to realize $22 billion or more in revenues for the year (does not include PC Games)."

Update, 4:41 p.m.: Nintendo crowed in a note to reporters that it had four of the top ten best-selling games in September, all of which use one of the company's unique game controls, such as the Wii Remote, Wii Balance Board and Wii Wheel.

Sony touted the total PlayStation line, including its hand-held unit and the previous-generation PlayStation 2, which still managed to sell 173,500 units and score a top ten game (EA's "Madden NFL '09," which was also a September best-seller on the 360).

Microsoft, meanwhile, is pleased with the lift it got from the price cut.

"The price cuts and some of the games coming out on the platform certainly put a lot of wind in our sales just like we hoped," David Dennis, Xbox 360 spokesman, said in an interview.

He said the console price cuts and forthcoming console and games packages were part of Microsoft's plan before the economic crisis grabbed consumers by the throat.

"Price drops are something that we factor into the business strategy well in advance," he said. "We look at the cost that it takes us to build the units and as we bring production costs down, we bring the cost console down as well to make it more approachable to a more mainstream audience."

Does Microsoft have anything left to offer consumers going into what's predicted to be one of the worst holiday shopping seasons in memory?

"I think we feel great about where we're at," Dennis said. "... There's a lot of reasons to buy a console and particularly an Xbox if you think of the cost per dollar value of entertainment compared to taking the kids to a football game or going on a vacation. … You can spend money on it once and continue to drive value out of it over and over again."

Microsoft's major marketing campaign focuses on the consoles price, among other things. Dennis said that Microsoft will also work with retailers to "highlight the value proposition of the Xbox as people are out doing their shopping."